Thursday, January 31, 2008

Do your duty and spend, spend, spend

The more I hear about the economic stimulus package promoted by Pres. Bush and the U.S. House, the less I like it. The money will have to be borrowed (again), which puts the U.S. deeper into a financial hole caused by the G.O.P.'s misguided policies of the past seven years. Endless wars cause endless expenditures. Corporate pals of Bush & Cheney get rich while the middle class ekes out an existence (if we're lucky) and gets foreclosed on if not.

My family would benefit from the rebate checks as proposed by the House bill. We are a working couple with a kid under-18 still at home, and still claimed as a dependent on our taxes. If I read the bill right, we'd get the largest check. After sending some of the money to Democratic candidates in Wyoming and nationally, we'd spend the rest of the money wildly on paying bills. No spending spree at Wal-Mart for us. Would this stimulate the economy? Would it bring us back from the precipice of recession? Not likely.

Our lone U.S. House rep, Barbara Cubin, voted against the economic stimulus package. I read her rationale on her web site. At first blush, I was impressed with Cubin's position. I rarely am. But on further investigation, found that her misgivings about the bill adhere pretty closely to the Republican Party line. Here's part of her 1/29/08 statement:

The Economic Stimulus Package will allow individuals who do not pay income taxes to receive a $300 check from the government. This provision will allow money earned by hard-working taxpayers to be handed out freely to individuals who pay no income tax.

Who could these people be? No doubt a coded reference to illegal immigrants. It couldn't be the wealthy who've received deep tax cuts under Bush and who hire sharp lawyers to make sure they get what's coming to them (everything!). Republicans are usually not shy when it comes to demonizing illegal immigrants. Immigration is one of the top three issues among G.O.P. voters, which it barely registers among Dems.

But Rep. Cubin does make some good points about bailing out the housing industry.

The package will greatly expand the federal government’s role in the housing market by increasing the amount of money government backed housing agencies can lend to people trying to buy a home. This provision will make it easier for certain individuals to purchase houses they might not actually be able to afford. Experts say a major cause of our nation’s current economic woes is the high number of people defaulting on housing loans. The Congresswoman has remained consistent that she does not believe taxpayer dollars should ever be used to bail out subprime mortgage lenders, who enable individuals to buy homes they may not be able to afford.

There's plenty of blame to go around in the sub-prime mortgage mess. Both borrowers are lenders have contributed to the problem. Rep. Cubin doesn't want the U.S. government ensnared in the mess, which is commendable. But how can we address our economic problems without paying attention to easy credit and the housing industry? For decades, we've been telling each other that owning a home is a right not a privilege. Home ownership stokes the economy. Are we now telling a broad swath of Americans that they can give up on their dreams? Many have already, as their jobs have been shipped overseas by corporate overlords. Job goes, money goes, house goes, especially if you have an adjustible rate mortgage and/or you've borrowed heavily against the equity (if you have any) in your house.

Cubin is committed to getting our housing market back on track, but says the key to doing this is putting more money back into the hands of the American people to ease the financial burden of homeownership. Cubin continues to be an outspoken advocate for permanent tax relief and has joined colleagues in the House of Representatives introducing the Economic Growth Act of 2008 to produce longer-term economic growth. The bill would allow businesses to deduct the full cost on their tax returns of any assets they purchase for their business; simplify and lower the capital gains tax for corporations to be able to invest more money back into the economy; and cut the top corporate tax rate from 35% to 25%, aligning our tax rate with the average rate in the European Union and making American companies more competitive internationally.

More tax cuts for corporations? If we align our top corporate tax rate with that in the EU, won't it be easier to ship American jobs overseas? I'll have to take a closer look at the Economic Growth Act of 2008 before I can speak about its details. But if the past teaches us anything, it's that the Republicans are good at tagging their proposals with ironic titles. Who can forget the "Clean Skies Initiative" which allowed more air pollution and the "Healthy Forests" plan which called for cutting down more forests? If the Repubs were still in charge of Congress, I'd say that the Economic Stimulus Plan would really be the "Sink the U.S. Economy" plan. But Congressional Democrats couldn't be that cynical, could they?

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